Business Law Test 1 Ch1-Ch6
1. Schools of Jurisprudence
The Natural Law School of jurisprudence postulates that law is based on what is “correct.”
Natural law philosophers emphasize a moral theory of law—that is, law should be based on
morality and ethics.
The Historical School of jurisprudence believes that the law is an aggregate of social
traditions and customs. It believes that changes in the norms of society will gradually be
reflected in the law.
The Analytical School of jurisprudence maintains that the law is shaped by logic. The
emphasis is on the logic of the result rather than on how the result is reached.
The Sociological School of jurisprudence asserts that the law is a means of achieving and
advancing certain sociological goals. The followers of this philosophy, known as realists,
believe that the purpose of law is to shape social behavior.
The philosophers of the Command School of jurisprudence believe that the law is a set of rules
developed, communicated, and enforced by the ruling party rather than a reflection of the
society’s morality, history, logic, or sociology.
The Critical Legal Studies School proposes that legal rules are unnecessary and are used as an
obstacle by the powerful to maintain the status quo. Under this theory, subjective decision
making by judges would be permitted.
The Law and Economics School believes that promoting market efficiency should be the
central goal of legal decision making. This school is also called the Chicago School, named
after the University of Chicago, where it was first developed.
2. Common Law History (equity courts, Henry II)
Committing a crime was not only a crime against the individual but a breach of the “King’s
Peace.”
Common Law-A traditional body of unwritten legal precedents
-Created through everyday practice in English society
-Supported by court decisions during the Middle Ages.
Later expanded and made more fair by Henry II (1154-1189) who appointed royal judges to
dispense fair justice in his kingdom.
Henry II ruled England and controlled more of France then the French King.
In order to consolidate his power in England he made his court’s the best in the land.
Eventually, he became dedicated to the concept of justice for justice’s sake and his court’s
became the fairest and most advance in Europe.
After Henry’s death, English jurist’s like Henri de Bracton (c.1210-c. 1268) began to write
down an codify the common law of England.
English common law was law developed by judges who issued their opinions when deciding
cases. The principles announced in these cases became precedent for later judges deciding
similar cases.
The English Common Law can be divided into cases decided by the law courts, equity courts,
and merchant courts.
3. Common Law vs Codified Law
In the United States, in most jurisdictions, the common law has been incorporated into
statues which directly state what the law is.
When it comes to criminal law almost all of the law is codified from the Common Law.
Many civil laws have also been codified into state statutes or rejected by statute.
Common Law Marriage- most states no longer have “common law marriage” (Seven states
and the District of Columbia still recognize common law marriage)
4. Stare Decisis
Thus, all federal and state courts in the United States must follow the precedents established
by U.S. Supreme Court decisions. Adherence to precedent is called stare decisis (“to stand by
the decision”).
5. Constitution Supremacy Clause (treaties, statutes, federal)
No bills of attainder (legislative trials)
No ex post facto laws (any law that makes an act a crime that was not a crime when it was
committed or increases the penalty after the fact).
No titles of nobility
No religious test to hold office
Safeguard of the writ of habeas corpus.
The Bill of Rights was added later outlining some of the unalienable rights of people that
people maintain.
Codified Law
Statutes are enacted by Congress and state legislatures.
Ordinances are enacted by municipalities and local government agencies.
Both establish courses of conduct that must be followed by covered parties.
Treaties
The president, with the advice and consent of the Senate, may enter into treaties with foreign
governments.
Executive orders
Issued by the president and governors of states.
They regulate the conduct of covered parties.
Administrative agency regulations and orders
Administrative agencies are created by the legislative and executive branches of government.
They may adopt administrative regulations and issue order that regulate the conduct of
covered parties.
Judicial decisions
Federal and state courts decide controversies.
In doing so, they issue decisions that state the holding of each case and the reasoning used by
the court in reaching its decision.
The U.S. Constitution and treaties take precedence over all other laws.
Federal statues take precedence over federal regulations.
Valid federal law takes precedence over conflicting state or local law.
State constitutions rank as the highest state law.
State statues take precedence over state regulations.
Valid state law takes precedence over local laws.
6. Checks and Balances
The U.S. Constitution established the structure of the federal government. It created three
branches of government and gave them the following powers:
The legislative branch (Congress) has the power to make (enact) the law.
The executive branch (president) has the power to enforce the law.
The judicial branch (Article One Courts) has the power to interpret and determine the validity
of the law.
The federal government is divided into three branches:
Article I: Legislative branch—Article I of the Constitution establishes the legislative branch of
the federal government.
The legislative branch is responsible for making federal law. This branch is bicameral; that is,
it consists of the U.S. Senate and the U.S. House of Representatives.
Collectively, they are referred to as U.S. Congress, or simply Congress.
Each state has two senators in the U.S. Senate.
The number of representatives to the U.S. House of Representatives is determined according
to the population of each state (435 representatives total).
Article II: Executive branch—Article II of the Constitution establishes the executive branch of
the federal government by providing for the election of the president and vice-president.
The president is not elected by popular vote, but instead is selected by the Electoral College,
whose representatives are appointed by state delegations.
The president executes the law and controls the armed forces and law-enforcement arms of
government.
Article III: Judicial branch—Article III of the Constitution establishes the judicial branch of the
federal government by establishing the U.S. Supreme Court and providing for the creation of
other federal courts by Congress.
The U.S. Supreme Court; The U.S. Circuit Court of Appeals; and the U.S. District Courts are
called “Article III Courts”.
The Article III Courts are the judicial branch of government and independent. (compared to
the Article I courts).
7. 1st Amendment Clauses (freedom of speech)
One of the most honored freedoms guaranteed by the Bill of Rights is the freedom of speech
of the First Amendment. The U.S. Supreme Court places speech into three categories:
Fully protected speech
Limited protected speech
Unprotected speech
The U.S. Constitution requires federal, state, and local governments to be neutral toward
religion. The Establishment Clause prohibits the government from either establishing a
government-sponsored religion or promoting one religion over another.
The Free Exercise Clause prohibits the government from interfering with the free exercise of
religion in the United States. Generally, this clause prevents the government from enacting
laws that either prohibit or inhibit individuals from participating in or practicing their chosen
religions.
8. Preemption Doctrine
The concept of federal law taking precedence over state or local law is commonly called the
preemption doctrine.
9. Supremacy Clause of the Constitution
The Supremacy Clause establishes that the U.S. Constitution and federal treaties, laws, and
regulations are the supreme law of the Land. The concept of federal law taking precedence
over state or local law is commonly called the preemption doctrine.
Congress may expressly provide that a particular federal statute exclusively regulates a
specific area or activity. No state or local law regulating the area or activity is valid if there is
such a statute.
Often, though, federal statutes do not expressly provide for exclusive jurisdiction. In these
